India Bond House: Barclays

IFR Asia Awards 2019
3 min read
Krishna Merchant

Beyond borders

In one of the most difficult years for the Indian bond market, Barclays stood out for its ability to deliver offshore financings for a wide range of clients, helping navigate a funding crunch in the domestic market.

Barclays worked on debut issues for non-bank lenders, the first perpetual bond from India’s telecom sector and a first-of-its-kind project bond, as well as the largest acquisition financing in the domestic market in the consumer sector.

The bank was a lead on the US$400m debut offshore bond from Shriram Transport Finance, taking advantage of a rule change that lowered the minimum tenor for offshore bonds to three years from the earlier five.

The deal opened an alternative source of funding for non-bank financing companies, which had been facing a liquidity crunch and higher rupee borrowing costs as a result of the high-profile default by Infrastructure Leasing & Financial Services Group in 2018. Shriram was able to come again to the dollar bond market in April to raise US$500m from 3.5-year bonds, and others followed later in the year.

Barclays was joint bookrunner on the US$750m hybrid perpetual non-call 5.5 year offering of Bharti Airtel, the first offshore perpetual bond from India for six years. Amid intense competition in the telecom sector, the deal drew orders of over US$1.5bn from 117 accounts, allowing Bharti to price 35bp inside initial guidance.

Adani Green Energy’s US$362.5m 20-year amortising green bond was another highlight. The deal helped the issuer cut its financing costs and satisfied investor demand for long-term infrastructure paper, with a book of over US$2.1bn from more than 150 accounts.

Barclays, which has a strong relationship with the Adani group, played a key role in answering investors’ questions on the structure. A restricted group of three special purpose vehicles with total solar capacity of 570MW issued the bonds, supported by long-term power purchase agreements with entities like state-backed Solar Energy Corp of India, which helped the issue earn an investment-grade rating.

In all, Barclays brought 28 G3 issues from India, taking 12.3% market share and recording US$2.6bn of volume during IFR’s review period. It helped high-yield issuers including JSW Steel and Indiabulls Housing Finance as well as renewable power companies like Renew Power, Azure Power and Greenko, tap the offshore market.* This was on top of helping several investment-grade state-owned companies to successfully issue dollar bonds.

In the domestic market, Barclays was the sole lead manager for the largest acquisition-related bond in India’s consumer sector. It helped AA+ rated Zydus Wellness raise Rs15bn for its acquisition of Heinz India in January, at a time when risk aversion was at its peak.

*Corrects deal list in 8th paragraph.

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